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PU China 2018: Hongbaoli mulls US plant to thwart trade war

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Shanghai, China – Hongbaoli is contemplating investing in a US plant with 20-30kT/year polyether polyol capacity if the US imposes 25% tariffs on polyol imports from China.

Hongbaioli’s headquarters

Hongbaoli has 180kT/year rigid polyether polyol capacity and 15m m2/year high flame-retardant insulation panel capacity. An expansion project with 120kT/year propylene oxide capacity also came on stream earlier this year.

Last year, the US market accounted for over 10% of the company’s sales, sales manager Wu Yiming told UTECH-polyurethane.com.

In total, the company had sales of CNY 2bn ($318m).

‘We highly value the US market as it has higher gross margin and the demand is more stable,’ said Wu.

‘This is because clients have higher technical requests and couldn’t easily switch to a different supplier.’

Opening a new plant in other regions such as Southeast Asia would not be as practical. Wu said that this was because of supply chain problems.

About Jane Ho

Jane Ho is Utech-polyurethane.com and Urethanes Technology International’s China correspondent. Jane has been writing about the Chinese polyurethane industry since 2013 covering news and in-depth segment reports. She also works for a number of other publications in the region including Forbes.